First Federal Lakewood is issuing this notice to alert customers to potential indicators of imposter scams and money mule schemes, which are two forms of consumer fraud observed during the COVID-19 pandemic. Many illicit actors are engaged in fraudulent schemes that exploit vulnerabilities created by the pandemic. This notice contains descriptions of imposter scams, money mule schemes, and financial red flag indicators to help keep you and your money safe.
In imposter scams, criminals impersonate organizations such as government agencies, non-profit groups, universities or charities to offer fraudulent services or otherwise defraud victims. While imposter scams can take multiple forms, the basic methodology involves an actor (1) contacting a target under the false pretense of representing an official organization, and (2) coercing or convincing the target to provide funds or valuable information (social security number, bank account numbers, etc.), engage in behavior that causes the target’s computer to be infected with malware, or spread disinformation. In schemes connected to the COVID-19 pandemic, imposters may pose as officials from the Internal Revenue Service (IRS), the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO), other healthcare or non-profit groups and academic institutions.
Illicit actors can use imposter scams to defraud and deceive the vulnerable, including the elderly and unemployed, through the solicitation of payments (such as digital payments and virtual currency), donations, or personal information via email, robocalls, text messages, or other communication methods. For example, an imposter may contact potential victims by phone, email, or text to imply that the victim must verify personal information or send payments to scammers in return for COVID-19-related stimulus payments or benefits, including Economic Impact Payments (EIP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Another instance includes imposters contacting victims and posing as government or health care representatives engaged in COVID-19 contact tracing activities, implying that a victim must share personal or financial information as part of contact tracing efforts.
The following are red flags to be aware of to avoid falling victim to imposter scams related to COVID-19:
• A person claiming to represent a government agency contacts you by phone, email, text message, or social media asking for personal or bank account information to verify, process, or expedite EIPs, unemployment insurance, or other benefits. In particular, be alert to communications emphasizing “stimulus check” or “stimulus payment” in solicitations, sometimes claiming that the fraudulent entity can expedite the “stimulus check” or other government payment on behalf of the beneficiary for a fee paid by gift card or prepaid card.
• Receipt of a document that appears to be a check or a prepaid debit card from the U.S. Treasury, often in an amount less than the expected EIP, with instructions to contact the fraudulent government agency, via a phone number or online, to verify personal information in order to receive the entire benefit.
• Unsolicited communications from purported trusted sources or government programs related to COVID-19, instructing readers to open embedded links or files or to provide personal or financial information, including account credentials (e.g., usernames and passwords).
• Email addresses in COVID-19 correspondence that do not match the name of the sender, contain misspellings, or do not end in the corresponding domain of the organization from which the message allegedly was sent. For example, government agencies will use “.gov” or “.mil.” Many legitimate charities will use “.org.” WHO emails will contain “@who.int.” Fraudsters, however, may use “.com” or “.biz” in place of the expected domain.
• Solicitations where the person, email, or social media advertisement seeks donations on behalf of a reputable organization, but is not affiliated with the reputable organization (e.g., the solicitor is not recognized or endorsed as an employee or volunteer by the organization, the email address is misspelled or not connected to the organization, or the social media advertisement directs individuals to an unaffiliated website).
• A charitable organization soliciting donations that (1) does not have an in-depth history, financial reports, IRS annual returns, documentation of their tax-exempt status, or (2) cannot be verified by using various internet-based resources that may assist in confirming the group’s existence and its nonprofit status.
Money Mule Scams
A money mule is “a person who transfers illegally acquired money on behalf of or at the direction of another.” Money mule schemes, including those related to the COVID-19 pandemic, span the spectrum of using unwitting, witting, or complicit money mules. An unwitting or unknowing money mule is an individual who is “unaware that he or she is part of a larger criminal scheme.” The individual is motivated by his/her trust in someone they think has a romantic interest in them, a promising job position, or proposition. A witting money mule is an individual who “chooses to ignore obvious red flags or acts willfully blind to his/ her money movement activity.” The individual is motivated by financial gain or an unwillingness to acknowledge his/her role. A complicit money mule is an individual who is “aware of his/her role as a money mule and is complicit in the larger criminal scheme.” The individual is motivated by financial gain or loyalty to a criminal group. During the COVID-19 pandemic, U.S. authorities have detected recruiters using money mule schemes, such as good-Samaritan, romance, and work-from-home schemes. U.S. authorities also have identified criminals using money mules to exploit unemployment insurance programs during the COVID-19 pandemic.
Financial red flag indicators of COVID-19 money mule schemes may include:
• Someone contacts you to open a new bank account in the name of a business and, shortly thereafter, someone transfers the funds out of the account. The scammer could instruct you to transfer the money out yourself. The fraudster that contacts you may instruct you to not provide information to the bank or to lie to the bank indicating that it is a “work from home” opportunity or “related to COVID-19.”
• If you receive multiple state unemployment insurance payments to your account followed by instructions to transfer the money out via cash or gift cards to someone else. Check your account history to make sure you are receiving the correct number of disbursements from the correct states.
• A new employer or friend asks you to provide your bank account information to receive a benefit payment and then requests that you purchase a money order or withdraw cash while keeping a small percentage of the funds for yourself.
Please keep an eye out for these imposter and money mule scam red flags to ensure you aren’t a victim of a scam during the COVID-19 pandemic. If you believe you may be a victim of these scams, please contact First Federal Lakewood via our customer service team at (216)-529-2700 or (800)-966-7300, or at a branch location near you.